BELGRADE, March 12 (Reuters) - The International Monetary Fund began talks with Serbia on Monday over future cooperation, after the end of a three-year 1.2 billion-euro ($1.48 billion) standby loan deal.

An IMF team led by James Roaf will stay in Serbia until March 16. It first met with the central bank governor Jorgovanka Tabakovic and finance minister Dusan Vujovic, the central bank said in a statement.

Serbia successfully completed its loan programme with the lender last month, but the IMF warned Belgrade had to improve its business climate and ailing infrastructure to catch up with Western European peers.

The central bank said Serbian and IMF officials would discuss reforms and modalities of future cooperation now that goals on macroeconomic balance and stability of public finances had been achieved.

“This time the talks will focus on future economic policy priorities that would solidify achieved results and secure long-lasting and sustainable growth,” it said.

Belgrade is likely to seek an arrangement with the fund in the form of a Policy Coordination Instrument (PCI) - a programme intended for countries seeking to demonstrate commitment to a reform agenda or to unlock and coordinate financing from other official creditors or private investors.

Serbia’s economic output grew by only a moderate two percent in 2017, affected by a drop in winter electricity output and a poor harvest after months of drought. The economy is forecast to grow 3.5 percent this year.